With 2 more days to go before the pivotal U.S. non-farm payrolls report, the dollar extended its gains against all of the major currencies. Milestones were reached in some pairs while others broke key levels. The sustainability of the dollar's rally has been nothing short of impressive but it should not surprise investors since the strongest moves in the FX market are the ones supported by fundamental drivers. In this case the Federal Reserve is getting ready to reduce the amount of stimulus that it provides to the economy and investors are just looking for economic data to confirm that the economy is ready for tapering. The dollar faces its first test today with a number of U.S. economic reports on the calendar that will help shape expectations for Friday's release. The day starts off with a layoff report from Challenger Grey & Christmas that will be followed by the ADP Employment Change, jobless claims and most importantly, the ISM non-manufacturing index. Earlier this week we learned that the manufacturing sector lost jobs for the first time since 2009 and now the question is whether the service sector suffered the same fate. We don't think that it did because otherwise the Fed would not have lowered its unemployment rate forecasts but there's always the risk the data could surprise to the downside. Layoffs are expected to decline and most likely ADP will report an increase in U.S. payrolls.https://support.fxcc.com/email/technical/03072013/

Upwards scenario: Immediate resistance at 1.2989 (R1) remains in near-term focus, climb above this level might open way for a recovery action towards to next interim target at 1.3013 (R2) and any further rise would then be limited to final resistive measure at 1.3038 (R3) Downwards scenario: Medium-term descending structure might get more stimulus if the price manages to overcome next support level at 1.2954 (S1). Clearance here would suggest initial targets at 1.2923 (S2) and 1.2910 (S3).

Upwards scenario: Market sentiment is negative according to the technical indicators. Though any prolonged movement above the resistive measure at 1.5181 (R1) would suggest next intraday targets at 1.5209 (R2) and 1.5237 (R3). Downwards scenario: Depreciation below the support level at 1.5133 (S1) would suggest next intraday target at 1.5107 (S2) and any further weakening would then be limited to final support level at 1.5080 (S3).

Upwards scenario: On the upside resistive structure at 100.87 (R1) prevents further gains. Clearance here is required to open route towards to next target at 101.12 (R2) and then final target could be triggered at 101.38 (R3). Downwards scenario: Though, possibility of correction is high. Devaluation below the support at 100.42 (S1) would initiate bearish pressure. On the way our next interim support at 100.16 (S2) en route to final target at 99.91 (S3).